Financial Stability Oversight Council December 2010 – Federal Register Recent Federal Regulation Documents

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``DFA'') gives the Financial Stability Oversight Council (the ``Council'') the authority to identify and designate as systemically important a financial market utility if the Council determines that the failure, or a disruption to the functioning, of a financial market utility could create or increase the risk of significant liquidity or credit problems spreading among financial institutions or markets and thereby threaten the stability of the financial system of the United States. The DFA generally defines a ``financial market utility'' as any person that manages or operates a multilateral system for the purpose of transferring, clearing, or settling payments, securities, or other financial transactions among financial institutions or between financial institutions and that person.\1\ The utility-like arrangements used to settle financial transactions, whether involving payments, securities, derivatives, or other similar financial instruments, are critical parts of the financial infrastructure for the economy and are integral to the soundness of the financial system and overall economic performance. The importance of these arrangements has been highlighted by the recent period of market stress. This advance notice of proposed rulemaking (ANPR) invites public comment on the criteria and analytical framework that should be applied by the Council in designating financial market utilities under the DFA.